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Consider the following statements regarding Operating Ratio.
1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.
2. Indian Railways had operating ratio of more than 90 percent in 2019-2020.
Which of the above statements is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Consider the following statements regarding Operating Ratio.1. Operati...
Operating ratio, simply put, is amount of money the Railways has to spend to earn ₹100. Lower operating ratio implies better financial health.
THE COMPTROLLER and Auditor General of India in its report on Railways’ finances noted that the Indian Railways’ operating ratio of 98.36% in 2019-2020 does not reflect its true financial performance and if the actual expenditure on pension payments is taken into account, the ratio will be 114.35 %.
Most Upvoted Answer
Consider the following statements regarding Operating Ratio.1. Operati...
Explanation:
The correct answer is option 'B' - 2 only.
Operating Ratio:
Operating Ratio is a financial indicator that is commonly used in the railway industry to measure the efficiency of operations. It is calculated by dividing the total working expenses of a railway by its net revenue from operations. The result is expressed as a percentage.
Statement 1:
Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.
This statement is incorrect. Operating Ratio is not good if it is more than 100. In fact, an Operating Ratio of more than 100 indicates that the working expenses of the railway exceed its net revenue from operations, resulting in a loss. A lower Operating Ratio is considered better as it indicates that the railway is able to cover its working expenses with its revenue.
Statement 2:
Indian Railways had an operating ratio of more than 90 percent in 2019-2020.
This statement is correct. Indian Railways had an operating ratio of 97.29 percent in the financial year 2019-2020. This means that the working expenses of the railway accounted for 97.29 percent of its net revenue from operations. The operating ratio of Indian Railways has been consistently high in recent years, indicating the financial challenges faced by the organization.
The high operating ratio of Indian Railways indicates that it needs to generate more revenue or reduce its working expenses in order to improve its financial health. This can be achieved through various measures such as increasing passenger and freight fares, improving operational efficiency, reducing wasteful expenditure, and exploring new revenue streams.
In conclusion, the correct statements regarding Operating Ratio are:
1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100. (Incorrect)
2. Indian Railways had an operating ratio of more than 90 percent in 2019-2020. (Correct)
The correct answer is option 'B' - 2 only.
Operating Ratio:
Operating Ratio is a financial indicator that is commonly used in the railway industry to measure the efficiency of operations. It is calculated by dividing the total working expenses of a railway by its net revenue from operations. The result is expressed as a percentage.
Statement 1:
Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.
This statement is incorrect. Operating Ratio is not good if it is more than 100. In fact, an Operating Ratio of more than 100 indicates that the working expenses of the railway exceed its net revenue from operations, resulting in a loss. A lower Operating Ratio is considered better as it indicates that the railway is able to cover its working expenses with its revenue.
Statement 2:
Indian Railways had an operating ratio of more than 90 percent in 2019-2020.
This statement is correct. Indian Railways had an operating ratio of 97.29 percent in the financial year 2019-2020. This means that the working expenses of the railway accounted for 97.29 percent of its net revenue from operations. The operating ratio of Indian Railways has been consistently high in recent years, indicating the financial challenges faced by the organization.
The high operating ratio of Indian Railways indicates that it needs to generate more revenue or reduce its working expenses in order to improve its financial health. This can be achieved through various measures such as increasing passenger and freight fares, improving operational efficiency, reducing wasteful expenditure, and exploring new revenue streams.
In conclusion, the correct statements regarding Operating Ratio are:
1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100. (Incorrect)
2. Indian Railways had an operating ratio of more than 90 percent in 2019-2020. (Correct)
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Consider the following statements regarding Operating Ratio.1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.2. Indian Railways had operating ratio of more than 90 percent in 2019-2020.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Operating Ratio.1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.2. Indian Railways had operating ratio of more than 90 percent in 2019-2020.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Operating Ratio.1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.2. Indian Railways had operating ratio of more than 90 percent in 2019-2020.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?.
Consider the following statements regarding Operating Ratio.1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.2. Indian Railways had operating ratio of more than 90 percent in 2019-2020.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Operating Ratio.1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.2. Indian Railways had operating ratio of more than 90 percent in 2019-2020.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Operating Ratio.1. Operating Ratio is a term associated with Indian Railways and it is good if it is more than 100.2. Indian Railways had operating ratio of more than 90 percent in 2019-2020.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?.
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